GPT’s Climate Change and Energy Policy commits the group to carbon neutrality in areas within control of the business while also encouraging stakeholders within the group’s influence to reduce greenhouse gas emissions and energy use.

Since 2005 the Group has achieved:

41% reduction in energy intensity and;

61% reduction in emissions intensity.

In 2017 this meant:

$21.72 million of electricity and $1.2 million of gas bill costs avoided; and

Background and Policy

GPT recognises that greenhouse gas (GHG) emissions globally are at unsustainable levels and the science indicates urgent response is necessary through carbon reduction efforts to mitigate and adapt to the impacts of climate change.

GPT’s first principles approach and commitments to managing the greenhouse gas emissions and energy consumption from our buildings is primarily guided by the scientific imperative of avoiding dangerous climate change. Our contribution to this is the elimination of emissions that contribute to climate change. We welcome the increasing number of governments and businesses also adopting zero carbon targets following the 2015 Paris UN climate change agreements, which noted the objective of a decarbonised global economy by 2050.

GPT aims to reach our target before 2030. We continuously conduct analysis on the pathway to carbon neutral for our buildings which comprises managing efficient buildings that run on renewable energy, using carbon offsets as a last resort. We also actively work with our supply chain, including our critical suppliers as well as our customers to influence their practices. Where possible, we share objectives and targets with our external partners.

We believe that focusing our efforts on operating our assets efficiently will enable us to not only play our part in the mitigation of climate change, but also:

Minimise the impact of rising energy prices on our tenants and investors; and

Meet and exceed regulatory and tenant expectations and requirements.

In managing our asset portfolio we also monitor and assess adaptation risks and opportunities arising from the impact of climate change on our assets and take account of these in our investment decisions.

GPT participates indirectly in climate change public policy development through membership and participation in a range of industry organisations including the Property Council of Australia, Green Building Council of Australia and the City of Sydney Better Building Partnership.

Our ongoing target is continuing to improve environmental performance above the average rate of the Global Real Estate Sustainability Benchmark - Green Stars in all relevant environmental categories while continuing to strive to meet the aspirational targets as fast as commercially viable.

Performance

GPT has reduced energy used per square metre of lettable space by 41% since 2005, from 139 megajoules per square metre in 2005 to 338 megajoules per square metre in 2017. Energy intensity reductions have been achieved across all portfolios, with

Office has achieved a 46% improvement (2005 baseline);

Retail has achieved a 35% improvement (2005 baseline); and

Logistics has achieved a 35% improvement (2007 baseline).

NABERS Ratings are maintained at all rate-able assets – more information is available on the NABERS page.

GPT's Methods for Achieving Reductions

Savings have been achieved through a range of initiatives informed by diligent metering and monitoring of energy use that enables us to make informed decisions on the most effective and efficient means of reducing energy and greenhouse gas emissions. Key initiatives include:

Targets and monitoring

Site targets are set annually, taking account of improvement plans and performance is closely monitored through the year via management reporting

Metering

Sub-metering enables allocation of consumption costs on a user-pays basis at an increasing number of sites.

Energy Efficiency

Use of energy efficient appliances in new developments

Efficiency upgrades at existing sites, where viable, including lighting replacements, installation of separate switches, installation of PE cells, and use of sensors.

For example: During 2015 and 2016, a portfolio-wide lighting analysis was conducted and subsequent LED lighting was installed across GPT’s retail portfolio, estimated to save over $900,000 every year.

Replacement with more efficient appliances as part of normal maintenance and capital programs, including making use of variable speed drives for escalators and higher efficiency chillers.

For example: GPT’s lifecycle assessment process for capital expenditure in managed assets prioritises environmental performance as one of 3 key deliverables, focusing employees and consultants on finding the optimal solution for ongoing performance.

Changing the start/stop time on mechanical plant (especially air-conditioning plant) to best match occupant needs.

Use of sub-metering and analytics systems to monitor, profile and detect equipment inefficiencies.

Passive energy

Use of passive forms of energy and natural ventilation where possible.

For example, at Rouse Hill Town Centre the Building Management System adjusts shades to optimally use the sun for warmth and lighting.

Renewable energy generation

Installation of solar PV systems and a rolling assessment of business case analysis for existing assets.

GPT currently has onsite solar PV systems as per the table below:

Property

Peak solar capacity (kW)

Casuarina Shopping Centre

1250 kW

Rouse Hill Shopping Centre

350 kW

Homemaker Maribyrnong

50 kW

Citiport

20 kW

Total

1650 kW

Renewable energy procurement

Purchase of government accredited GreenPower, which is additional to any grid renewables.

In 2017 GPT purchased 40% GreenPower for all GPT managed assets which, when combined with co-owned and externally managed assets and their GreenPower supply, resulted in over 30% of base building electricity coming from certified renewable sources.

On-site energy production

Implementation of on-site energy production through co- or tri-generation technology, which provides electricity as well as heating and cooling (for tri-generation) efficiencies. GPT currently onsite generation systems as per the table below:

Property

Gas generator electrical capacity (approx) kW

Charlestown Square Shopping Centre

2800

Liberty Place, 161 Castlereagh St

1200

ONE ONE ONE Eagle St

1200

530 Collins St

800

Workplace

800

150 Collins St

300

Total

7100

Tenant Support

Training for Investment Managers in environmental outcomes and on-going communication with tenants.

Site tours to renewable energy plants to aid tenant education and awareness on how 'green' electricity is produced.

Read about our case studies for more information on of how GPT has achieved energy and emissions reductions.

Committed to Carbon Neutrality

GPT has achieved its commitment to provide carbon neutral workplaces for all GPT staff by improving the efficiency of its workspaces, utilising renewable green power and purchasing offsets for the remaining emissions. To achieve carbon neutrality GPT has:

Improved energy efficiency

Reduced paper consumption

Introduced video conferencing between major centres resulting in a reduction in travel

Purchased zero or low carbon products, especially Green Power

Used certified offsets as a last resort to compensate for unavoidable emissions.

A summary table of operational emissions associated with GPT employees performing their roles and operating tenancies occupied by GPT employees was recently prepared for year ending 2017. This includes the head office, MLC Centre tenancy and management offices at GPT managed properties.

GPT’s Greenhouse Inventory was compiled by Pangolin Associates and certified against the National Carbon Offset Standard (NCOS).

Climate Adaptation

GPT has commissioned specialist advice to assess the exposure of the asset locations to projected climate changes. Some assets, such as Casuarina Square and Sunshine Plaza, are located in areas that already face severe climatic conditions. However the majority of GPT’s assets are sited in areas that are not forecast to suffer the most severe climatic changes in the foreseeable future.

GPT recognises climate change is a real threat and as such its consequences are addressed as part of a normal risk management framework. GPT continually monitors revisions to projected climate change that are based on sound scientific criteria relevant to Australian conditions, and update asset and business risks accordingly. Membership and participation in the Property Council of Australia and the Australian Sustainable Built Environment Council provides access to the latest adaptation information.

Operationally, GPT continues to update and adjust contingency, maintenance and asset replacement plans to take account of potential climate change impacts. While climate change may increase the intensity and frequency of flooding, extreme heat days, hail and wind storms, these and their secondary impacts already occur and are planned for.

Challenges and Outlook

Mitigating and adapting to climate change is a complex global issue and we recognise that achieving sustainable energy supplies requires widespread support and the cooperation of many stakeholders. GPT is taking an active role in meeting the many challenges, such as those outlined below:

Skills and expertise development (internally and externally)

Leading by example in specifications, contracts and briefs, for example GPT’s new developments integrate world-leading sustainability expectations into briefs for design and development

Making sustainability data accessible through a company-wide computer system to provide reporting that meets the needs of all users, from site level to the Board

Industry standards

Better Buildings Partnership Environmental Working Group, which focuses on creating best practice guidelines for managing energy and water performance

National Carbon Offset Standard for Buildings technical working group

On-site energy generation

To help address barriers to implementing and connecting on-site energy generation to the electricity network, GPT is

working with the Property Council of Australia to encourage greater recognition of demand side management opportunities;

and using our experience in on site electricity generation as examples when barriers to greater uptake of distributed generation are being considered.

Value and rating of energy efficiency

GPT contributed to the Green Building Council of Australia development of the Green Star Performance tool for existing buildings to improve understanding of energy efficiency and environmental impact of existing buildings.

Tenant support

To improve tenant awareness and understanding of energy efficiency and renewable energy generation, The Group is:

holding Building Management Committee meetings to provide information to tenants on building performance and how the tenant space interacts;

using the GPT head office workspace to showcase energy efficient technologies along with best practice material and resource efficiency for tenants; and

conducting tours to renewable energy sites for tenants and other interested people.

Carbon Pricing

While Australia has moved away from a carbon pricing model it remains a strategy that could be reapplied in the future. GPT mitigates the risk of a carbon price through the energy efficiency program while any increased costs of electricity and gas creates a greater incentive for energy efficiency and renewable energy projects. For internal purposes, the cost of energy efficiency, renewable energy and carbon offsets provide an internal metric for costing the Group’s achievement of its carbon neutral commitments.